Germany will demand the U.K. pay for the privilege of its financial firms having access to European Union markets after Brexit as Chancellor Angela Merkel’s government maintains a hard-line stance against a bespoke trade deal.

The U.K. cannot hope for a trade agreement that includes financial services unless Britain agrees to make substantial contributions to the EU budget and adheres to European law, according to German officials from two key government departments in Berlin. Both asked not to be named discussing internal government strategy.

Even before the negotiations start on Britain’s future relationship with the EU, Germany’s position risks thwarting the U.K.’s aim of securing a tailor-made deal. Prime Minister Theresa May’s government regards Germany’s stance as crucial -- both Chancellor of the Exchequer Philip Hammond and Brexit Secretary David Davis are due in Germany on Wednesday to meet business groups and make the case for a wide-ranging Brexit deal.

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In a joint article for German newspaper Frankfurter Allgemeine Zeitung published the same day, Hammond and Davis said they want a trade accord covering financial services to ensure that after the 2008 crash, “we do not put that hard-earned financial stability at risk.”

But Germany will reject any attempt to include financial services in a post-Brexit trade deal unless Britain drops its opposition to substantial budget payments, the government officials said. Otherwise, the U.K. is simply “cherry-picking” its favored aspects of EU membership without having to share any responsibility -- something Germany has explicitly rejected from the outset.

Norway or Switzerland

Non-EU countries Norway and Switzerland do have limited access to Europe’s single market, but they pay for the privilege. Canada, whose free-trade pact the EU says Britain’s will most closely resemble, doesn’t pay into the EU budget -- and financial services barely feature. According to the German officials, the U.K. must therefore choose between the Swiss or Norwegian models if financial services are to be included.

EU Budget Commissioner Guenther Oettinger told reporters in Brussels on Wednesday that U.K. payments after Britain’s planned post-Brexit transition phase ends in 2021 were a matter for the negotiations but that “the U.K. could reflect upon” how Switzerland pays to participate in some European projects.

Hammond, asked in Berlin if the U.K. would be ready to pay into the EU budget for bank access, said: “We will talk about all of these things.”

Bulgaria has a Brexit message for Britain: If the U.K. government seeks to divide the other European Union capitals during the negotiations, it should think again by looking at EU unity over sanctions against Russia.

Bulgarian Foreign Minister Ekaterina Zaharieva said the EU’s four-year-old penalties against Russia over its encroachment in Ukraine show that the U.K.’s 27 partners in the bloc can maintain a common front during the second phase of talks on the British plan to leave.

Both cases require EU governments to put longer-term political interests above shorter-term economic ones, she said. The sanctions against Russia -- prolonged for another six months in December -- include curbs on its financial, energy and defense industries and provoked a retaliatory Russian ban on EU farm goods.

“It’s really, really important to stay united” as the Brexit process advances, Zaharieva, whose country is the poorest in the EU and took over its rotating six-month presidency on Jan. 1, told reporters on Thursday in Sofia. “I think we can. The Russia sanctions are absolutely a good example.”

Britain and the rest of the EU are gearing up for the start of negotiations on their post-Brexit ties after a European summit in December declared that “sufficient progress” had been made over the divorce terms, including the financial settlement. Leaders including German Chancellor Angela Merkel say the next phase will be tougher -- a view echoed by Zaharieva.

“The first phase is not such a big problem to stay united,” she said. “Phase two will be really difficult.”

Spanish and Dutch finance ministers have agreed to push for a Brexit deal that keeps Britain as close to the European Union as possible, according to a person familiar with the situation.

Spanish Economy Minister Luis de Guindos and his Dutch counterpart Wopke Hoekstra met earlier this week and discussed their common interests in Brexit, according to the person, who declined to be identified. Both have close trade and investment ties and are concerned about the impact of tariffs. They are also worried about losing U.K. contributions to the EU budget, the person said.

Sounds like the EU or Tusk and Junker offered the UK for the last time to change its mind.
Not sure if they actually think at this stage they still will or its just a negotiating tactic to divide the UK.
I don't think you could still reasonably believe they would change at this point. That ship has sailed.

Germany will demand the U.K. pay for the privilege of its financial firms having access to European Union markets after Brexit as Chancellor Angela Merkel’s government maintains a hard-line stance against a bespoke trade deal.

The U.K. cannot hope for a trade agreement that includes financial services unless Britain agrees to make substantial contributions to the EU budget and adheres to European law, according to German officials from two key government departments in Berlin. Both asked not to be named discussing internal government strategy.

Even before the negotiations start on Britain’s future relationship with the EU, Germany’s position risks thwarting the U.K.’s aim of securing a tailor-made deal. Prime Minister Theresa May’s government regards Germany’s stance as crucial -- both Chancellor of the Exchequer Philip Hammond and Brexit Secretary David Davis are due in Germany on Wednesday to meet business groups and make the case for a wide-ranging Brexit deal.

​

In a joint article for German newspaper Frankfurter Allgemeine Zeitung published the same day, Hammond and Davis said they want a trade accord covering financial services to ensure that after the 2008 crash, “we do not put that hard-earned financial stability at risk.”

But Germany will reject any attempt to include financial services in a post-Brexit trade deal unless Britain drops its opposition to substantial budget payments, the government officials said. Otherwise, the U.K. is simply “cherry-picking” its favored aspects of EU membership without having to share any responsibility -- something Germany has explicitly rejected from the outset.

Norway or Switzerland

Non-EU countries Norway and Switzerland do have limited access to Europe’s single market, but they pay for the privilege. Canada, whose free-trade pact the EU says Britain’s will most closely resemble, doesn’t pay into the EU budget -- and financial services barely feature. According to the German officials, the U.K. must therefore choose between the Swiss or Norwegian models if financial services are to be included.

EU Budget Commissioner Guenther Oettinger told reporters in Brussels on Wednesday that U.K. payments after Britain’s planned post-Brexit transition phase ends in 2021 were a matter for the negotiations but that “the U.K. could reflect upon” how Switzerland pays to participate in some European projects.

Hammond, asked in Berlin if the U.K. would be ready to pay into the EU budget for bank access, said: “We will talk about all of these things.”

LOL, I didn't even know this is a thing! What's wrong with our chicken, chaps?!

The U.S. wants Britain to cut European Union regulations after Brexit to boost the chances of striking a free-trade deal between the two countries.

If Prime Minister Theresa May ditches some EU rules on farming and food processing, “there is a much greater opportunity for trade between the U.K. and U.S.,” according to Ted McKinney, undersecretary for trade at the U.S. Department of Agriculture.

“We hope that the U.K. will look for its own food standards, environmental safety protocols,” McKinney said in an interview on the fringes of a farming conference in Oxford on Thursday. “We find the EU a very difficult place to do business and so we hope that as part of Brexit, the reset button can at least be considered.”

May wants a trade deal with the U.S. and has discussed the matter with President Donald Trump. Working groups have begun to map out the shape of the agreement, which both sides say they would like to conclude quickly after Brexit. Britain is prevented from conducting formal trade talks with any country until it leaves the European Union in March 2019.

Despite these plans, trade relations soured because of a row between the two countries last year over food standards that focused on the issue of U.S. chlorine-treated poultry. McKinney said the U.S. is “sick and tired” of hearing from Britain that American chicken isn’t safe to eat.

“We would like all of British society to understand that is not a practice that’s in use very much,” McKinney said. “The quality of our poultry, we’d put up against U.K. poultry any day of the week and twice on Sunday."

American products are every bit as good as British food and Michael Gove, the British environment secretary, has privately assured U.S. officials that he would try to draw a line under the chicken dispute because it was not fair to American poultry producers, McKinney said. He added that he’ll be checking Google to make sure Gove keeps his word.

LOL, I didn't even know this is a thing! What's wrong with our chicken, chaps?!

May wants a trade deal with the U.S. and has discussed the matter with President Donald Trump. Working groups have begun to map out the shape of the agreement, which both sides say they would like to conclude quickly after Brexit. Britain is prevented from conducting formal trade talks with any country until it leaves the European Union in March 2019.

Despite these plans, trade relations soured because of a row between the two countries last year over food standards that focused on the issue of U.S. chlorine-treated poultry. McKinney said the U.S. is “sick and tired” of hearing from Britain that American chicken isn’t safe to eat.

“We would like all of British society to understand that is not a practice that’s in use very much,” McKinney said. “The quality of our poultry, we’d put up against U.K. poultry any day of the week and twice on Sunday."

American products are every bit as good as British food and Michael Gove, the British environment secretary, has privately assured U.S. officials that he would try to draw a line under the chicken dispute because it was not fair to American poultry producers, McKinney said. He added that he’ll be checking Google to make sure Gove keeps his word.

Click to expand...

So Trans Atlantic chickens are a sticking point.....the whole idea of that sounds more than a little absurd .

So Trans Atlantic chickens are a sticking point.....the whole idea of that sounds more than a little absurd .

Click to expand...

It is absurd, considered that the E.U's decision to ban poultry cleaned with chlorine is not actually a health and safety issue, despite all the insinuations with buzzwords like "low food safety standards".

There's nothing sinister about chlorine. Europeans drinks it in their tap water everyday, just like we do.

Deep down, it is actually a "chicken welfare" issue for the European Union.

LOL, I didn't even know this is a thing! What's wrong with our chicken, chaps?!

The U.S. wants Britain to cut European Union regulations after Brexit to boost the chances of striking a free-trade deal between the two countries.

If Prime Minister Theresa May ditches some EU rules on farming and food processing, “there is a much greater opportunity for trade between the U.K. and U.S.,” according to Ted McKinney, undersecretary for trade at the U.S. Department of Agriculture.

“We hope that the U.K. will look for its own food standards, environmental safety protocols,” McKinney said in an interview on the fringes of a farming conference in Oxford on Thursday. “We find the EU a very difficult place to do business and so we hope that as part of Brexit, the reset button can at least be considered.”

May wants a trade deal with the U.S. and has discussed the matter with President Donald Trump. Working groups have begun to map out the shape of the agreement, which both sides say they would like to conclude quickly after Brexit. Britain is prevented from conducting formal trade talks with any country until it leaves the European Union in March 2019.

Despite these plans, trade relations soured because of a row between the two countries last year over food standards that focused on the issue of U.S. chlorine-treated poultry. McKinney said the U.S. is “sick and tired” of hearing from Britain that American chicken isn’t safe to eat.

“We would like all of British society to understand that is not a practice that’s in use very much,” McKinney said. “The quality of our poultry, we’d put up against U.K. poultry any day of the week and twice on Sunday."

American products are every bit as good as British food and Michael Gove, the British environment secretary, has privately assured U.S. officials that he would try to draw a line under the chicken dispute because it was not fair to American poultry producers, McKinney said. He added that he’ll be checking Google to make sure Gove keeps his word.

Click to expand...

I don't know if I remember that 100% correctly but wasn't it the UK that pushed for stricter food regulation after the BSE (mad cow) crisis in the early 2000's?
Because they were hit the hardest. I remember those new regulations were a big issue for German farmers and they did a lot of protesting etc.
I am not sure how it's with chickens. But I would be surprised if the UK would relax those regulations even outside the EU.
But I am no expert on those.

I don't know if I remember that 100% correctly but wasn't it the UK that pushed for stricter food regulation after the BSE (mad cow) crisis in the early 2000's?
Because they were hit the hardest. I remember those new regulations were a big issue for German farmers and they did a lot of protesting etc.
I am not sure how it's with chickens. But I would be surprised if the UK would relax those regulations even outside the EU.
But I am no expert on those.

Click to expand...

Oh, this has nothing to do with food safety, not does the U.K has anything to do with it.

This is an E.U animal welfare law, their rationale is that if farmers are allowed to clean chicken meat with chlorine (which is scientifically proven to be 100% safe, as proven by the wide adoption of chlorinated tap water in Europe), then that would lead to "laxer animal welfare and sanitary conditions" at the chicken farms, because chickens in a dirty chicken coop can quickly be cleaned effectively and safely.

That rationale in turns gave way to European politicians and media getting creative with the insinuation that perfectly clean and safe American chicken is somehow "not safe to eat".

The debate now is that after Britain leaves the E.U, should they allow 100%-safe chlorine-washed chicken meat from the U.S to be imported, by dropping the E.U rules and adopt their own food safety standards that only deals with food safety and not "animal welfare".

Liam Fox, the trade secretary, has accused the media of being obsessed with safety concerns about chlorine-washed chicken being sold in Britain as part of a potential trade deal with the US after Brexit.

The controversy overshadowed the first day of Fox’s trip to Washington, amid worries that a trade deal with America could lead to imports of food with lower safety standards.

Campaign groups, the poultry industry and opposition politicians called on Fox to come clean about whether the UK is prepared to lift its ban on chlorine-washed chicken in order to accommodate US poultry farmers who want to sell their meat in Britain.

But Fox said the issue was a mere detail in lengthy potential trade negotiations, and dismissed a question about whether he would personally eat a chlorine-washed chicken himself.

“In a debate which should be about how we make our contribution to global liberalisation and the increased prosperity of both the UK, the US and our trading partners, the complexities of those – the continuity agreements, the short-term gains that we may make, the opportunities we have and our ability to work jointly towards both a free-trade agreement and WTO [World Trade Organisation] liberalisation – the British media are obsessed with chlorine-washed chickens, a detail of the very end-stage of one sector of a potential free trade agreement. I say no more than that,” he said.

Earlier, a source close to Fox had told the Telegraph he believed that “Americans have been eating it perfectly safely for years” and that any meaningful trade deal with the US would have to include agriculture.

No 10 also repeatedly declined to answer questions about whether it could lift the ban on chlorine-washed chicken or guarantee there would be no reduction in food standards after Brexit.

Theresa May’s official spokesman said maintaining safety and public confidence in food was of the highest priority, but it was too early to get into the specifics and “hypotheticals” of any deal.

“Any future trade deal must work for UK farmers, businesses and consumers,” he added.

The American farming industry is expected to push for agriculture to be included in any food deal, potentially opening the door for chlorine-washed chicken, hormone-fed beef and GM crops to be imported into the UK for the first time.

Washing poultry in chlorine is banned in the EU, with guidance suggesting the practice could lead to worsening of food standards. This is because abattoirs could rely on it as a decontaminant and the chemical washes could be used by unscrupulous producers to make meat appear fresher.

However, such a move would be resisted by British producers who would be worried about being undercut by US chicken farmers using lower standards and cheaper methods. If they switched to US methods themselves, it could be more difficult to sell their produce into the EU.

The British Poultry Council, the industry body, said it “rejects the notion of importing chlorine-washed chickens as part of a makeweight in trade negotiations with the US”.

It added: “The UK poultry meat industry stands committed to feeding the nation with nutritious food and any compromise on standards will not be tolerated. A secure post-Brexit deal must be about Britain’s future food security and safety. This is a matter of our reputation on the global stage.”

Barry Gardiner, Labour’s shadow trade secretary, said Fox’s comments show you should “never trust a Fox in your hen coop”.

“By arguing the case for chlorine-washed chicken, Liam Fox shows he is ready to abandon British poultry farmers in favour of cheap US imports that do not meet our sanitary or animal welfare standards,” he said.

“The US is our biggest trading partner outside of the EU and accounts for 17% of British exports. We want to see that figure grow and every effort must be made to support British exporters and reduce unnecessary barriers to trade, but never at the expense of the interests of British consumers and producers.”

Open Britain, the campaign group fighting against a hard Brexit, challenged the trade secretary to eat a chlorine-washed chicken himself, while Tim Farron, the former Lib Dem leader, accused Fox of “running into the trade negotiations like a headless chicken”.

“Parliament will not back a reduction to food standards as part of the repeal bill. This is a betrayal of British poultry farmers who currently work to the highest standards in the world. Liam Fox’s dangerous grovelling to the US is only going to see his chickens come home to roost,” he said.

However, some free marketeers believe the time has come to relax the ban on chlorine-washed chicken. The Adam Smith Institute, a rightwing thinktank, argued in a report on Monday that access to the US poultry market was likely to be a key sticking point in thrashing out an agreement with the US.

The thinktank said the UK should be prepared to adapt its standards, pointing to an assessment by the European Food Safety Authority that the chemical rinses, including chlorine dioxide, were safe to eat.

“Agreeing to US poultry imports would help to secure a quick US trade deal, and bring down costs for British households,” the report says. “European opposition to US agricultural exports has held up trade talks for years. By scrapping the ban on chlorinated chicken imports, the government will send a signal to potential trading partners across the globe that the UK remains an open-facing and free trading nation.”

However, Michael Gove, the environment secretary and leading Brexit supporter, gave a speech last week insisting that food safety standards must not be lowered as the UK leaves the EU.

Gove said on Friday that the UK should not take part in a “race to the bottom” to win new trading relationships. “Of course it’s important we explore new trading opportunities, with the United States and other nations across the world, but it must not be, and the cabinet is agreed on this, at the risk of dropping any environmental standards whatsoever,” he said.

Meanwhile, a House of Lords committee has warned that the greatest threat to farm animal welfare standards after Brexit would come from UK farmers competing against cheap imported food from countries with lower standards than the UK.

In a new report, the subcommittee on energy and the environment, said the government’s wish for the UK to become a global leader in free trade is “not necessarily compatible with its desire to maintain high animal welfare standards”.

Lord Teverson, the subcommittee chairman, said that the inquiry heard evidence of “undeniable concern that opening up the UK market to free global trade poses a number of issues”.

“As we said in our last report, Brexit: agriculture, the government may find it hard to reconcile its free trade ambitions with its commendable desire for preserving high farm animal welfare standards,” he said.

“We heard overwhelming support for farm animal welfare standards to be maintained or improved. To help achieve that, we urge the government to secure the inclusion of high farm animal welfare standards in any free trade agreements it negotiates after Brexit.”